Picking Up the Tab

"The self-funded model, by the way, has been very successful in Utah. I can't imagine being this far along in e-government without it"

It's no secret that the Internet forced society to change as the general public discovered the new electronic medium's many conveniences. Businesses scrambled to whip up Web sites to meet the sudden demand, and those sites evolved rapidly from simplistic to sophisticated, able to handle a variety of transactions directly with consumers or through third parties such as PayPal.

Public-sector leaders also recognized the benefits of various Web-based transactions with the range of constituents that different agencies serve. Government Web sites popped up on the Internet soon after the public's fascination with all things online proved permanent.

The problem is that once an agency went beyond a simple online brochure, nobody had a clear idea of how to proceed. Surprise, surprise -- the biggest unknown was devising a way to pay for electronic government.

Governments had three choices: build and manage their own Web sites; pay somebody else significant money to build and manage them; or sign a self-funding contract, which unlike the first two options, doesn't cost the government a dime.

The self-funding model clearly holds a certain attraction. Who doesn't like something for nothing? A significant number of states have deployed portals that pay for themselves through convenience fees for certain e-government transactions, known as self-funding portals.

There are strings attached to the approach, it's just that they're attached to somebody else. Still, the self-funding model seems to make sense with today's ultra-tight government budgets, and supporters argue they made more progress on e-government than they would have otherwise because they adopted a self-funding approach.

South Carolina Wades In

In April, South Carolina signed with Kansas-based e-government provider NIC to build and manage the state's e-government portal, making the state the 17th to contract with the company.

The state went to bid November 2003 and chose NIC from among 11 competitors, including BearingPoint, IBM and Official Payments Corp. State officials said the first new service launched this summer, and NIC representatives worked with state agencies and the E-Government Oversight Committee to identify and prioritize new applications.

South Carolina, like other states, sought the best product at the best value, said Ruth Kirkland, director of strategic communications for the Division of the State CIO.

"Cost and funding was a critical component," Kirkland said. "Also, managing the project from beginning to end, all the way to making the citizen aware of what services are available."

Doing all this at no cost to the state played a big part in NIC's eventual success in winning the bid, Kirkland continued, as did the company's familiarity with operating self-funding portals for various states.

As part of the contract, the state's existing portal will get a makeover, slated to include customization and personalization features, and more than 30 existing e-government services with online payment functionality will be moved to NIC's payment engine.

"Our current portal is somewhat dated," said Barbara Teusink, South Carolina's deputy CIO. "We've had a difficult time finding adequate time and resources to keep it as current and fresh as we would like internally, so we're looking to NIC to give it a fresh face, bring in updated information and give it a little more current perspective."

The portal's current design is vintage 2000, Kirkland added, and the state would like the portal to reflect advances in Internet-related technologies. Though the state is happy to turn over the portal maintenance to somebody else, doing so doesn't completely absolve state officials of duty.

"The biggest headache is working with all the agencies to find out what their needs are, what services they have that we need to make available to the citizens, how we're going to get those services online and going through all the technical gyrations to make them available," Kirkland said. "Then,